If you want to grow your income then you need to make some smart decisions on where to invest money. Simply storing it away in a bank won’t help it grow enough for you to live comfortably in your retirement. But there are so many investment options available and they may seem completely overwhelming. How do you know where to invest and when? Which will give you high returns and which is the best currency to invest in? If words like shares, inflation, unit trusts and emerging markets send you running for the hills, then hopefully this article will clarify things for you.
There are many people and businesses around that can help you to make smart decisions on where to invest money. Before you approach them, it is useful to be aware of the terminology they may use. Shares are the unit of account for financial markets (if you like, they are the currency that is exchanged). They are used in the exchange of stocks and investments. Inflation is the measurement used to describe how much more expensive goods and stocks have become over a particular period of time in a particular economy. If milk has gone from R6 to R12 per litre in one year, we can say that there was 100% inflation. Unit trusts are something that you can invest in and are part of a collective investment. What this basically means is that you invest money into a big pot, and you are then entitled to particular units. When the pot earns interest and makes money, you are paid out according to the number of units you own. Finally, emerging markets are those which are experiencing rapid levels of growth and industrialisation. They are normally considered good investments.
When you invest you want to put your cash in something that is going to give you high returns so that you can sit back and relax in your retirement. The safest way to ensure this is to approach your bank or a stock broking firm about how to make smart decisions on where to invest money.
Emerging Markets to Start Investing your Cash
Emerging markets to start investing your cash in according to MSCI Emerging Markets index include: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, South Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey. If you are wondering why you should consider investing in one of these nations then the answer is that these economies are increasing in size and therefore have lower interest rates and more widely available credit. Another reason to invest in emerging markets is that they are associated with high growth potential in all sectors.
Emerging markets to start investing your cash in account for nearly 40% of the world’s gross domestic product (GDP) and this is said to increase to approximately 50% by 2020. In addition to this, in comparison with developed countries the growth forecast is almost 4% higher so this means that there will be a greater return on the money that you invest. Furthermore, the debt levels of emerging markets are also said to be far lower (less than 40%) than those of developed countries. In countries like the United States of America, the debt level is said to be 100% of its GDP that means the opportunity for you to get a great return on your investment is small whereas emerging countries have more money to spend on fixed investments.
The only apparent downfall of these emerging markets is that they may seem to be overpriced in comparison to their developed counterparts. However analysts have advised that due to the high growth rates they are expected to grow faster. If you are interested in investing emerging markets it is always best to speak to an expert in this kind of investing or even speak to your investment banker who will be able to give you sound advise on which emerging markets to start investing your cash.